Bounce Back Loan & VAT Debt

Steve1109

Hey There,

Reaching out in the hope you can offer me some advice on my bounce back loan and VAT Debt.  I was self employed engineer contracting for an automotive vehicle manufacturer supporting prototype activities.  Due to covid restrictions the business was forced to suspend activities in March 2020 and didn't return July 2021 when restrictions eased somewhat and I started repaying the loan.  At the end of the year it became clear my contract wasn't going to be renewed in 2023 and I'd need to find another contract or role.  I opted for the security of a permanent position and kept managing to make the repayments on the bounce back loan only in April to receive a 5k VAT bill which I simply couldn't afford topped with another 1k bill from my accountant (which I also couldn't afford).  This only gets worse on a day to day basis with the current cost of living I'm just managing to survive and keep the wolf from the door.

I simply cannot afford to pay anything and I see no way out for the moment.  Debt owed total is just over £16000.  Just don't see any way out at the moment.

Kind regards,
Steve

MEM62

As far as I an aware, bounce back loans were given to companies, not individuals.  What happened to the company?  Is it still trading?    

newdriver101

Have you contacted HMRC to negotiate a payment plan for the VAT?  HMRC is a priority creditor and you could be personally liable even if the company is not trading...

EDIT: I think there is also a business debt helpline that you may be able to contact - someone with more knowledge will confirm.

macman

MEM62 said:

As far as I an aware, bounce back loans were given to companies, not individuals.  What happened to the company?  Is it still trading?    

BBL's were available to sole traders.

Grumpy_chap

Steve1109 said:

Hey There,

Reaching out in the hope you can offer me some advice on my bounce back loan and VAT Debt.  I was self employed engineer contracting for an automotive vehicle manufacturer supporting prototype activities.  Due to covid restrictions the business was forced to suspend activities in March 2020 and didn't return July 2021 when restrictions eased somewhat and I started repaying the loan.  At the end of the year it became clear my contract wasn't going to be renewed in 2023 and I'd need to find another contract or role.  I opted for the security of a permanent position and kept managing to make the repayments on the bounce back loan only in April to receive a 5k VAT bill which I simply couldn't afford topped with another 1k bill from my accountant (which I also couldn't afford).  This only gets worse on a day to day basis with the current cost of living I'm just managing to survive and keep the wolf from the door.

I simply cannot afford to pay anything and I see no way out for the moment.  Debt owed total is just over £16000.  Just don't see any way out at the moment.

Kind regards,
Steve

Were you trading as a Sole Trader or as Ltd Company?

It looks like you were still trading for the best part of 2 years after COVID from July 2021 through to 1st Quarter 2023. 
The VAT bill due in April probably relates to the trading invoices of 1st Quarter 2023 and indicates an invoiced value of £25k in excess of any input VAT recovered.
That would indicate an annual rate of earnings, say, £90k or thereabouts.

For the BBL, how was this spent - was it spent in accordance with the rules of the BBLS?
Was it a £10k BBLS that you had, so that plus the VAT plus the Accountant makes the £16k total?
Have you looked at any of the flexibility options within the BBLS?  Longer repayment term?  Payment break?

What are you now earning as an employee?
What other assets do you have?  Is there anything you could sell to help clear the debts?
What other liabilities do you have?

Can you prepare a full SoA (Statement of Affairs) and share within the DfW (Debtfree Wannabee) section of the forum?  The people over there are very helpful in finding solutions and non-judgemental.
Alternatively, try the debt charities for advice - stepchange / business charities / Citizens Advice.